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Raleigh, North Carolina
April 27, 2007
As the rain fell on downtown Raleigh today, another dark cloud also rested over Jones Street when former House Representative Michael Decker was sentenced this afternoon to four years in prison, two years probation and a $50,000 fine in connection with a political corruption investigation that toppled former House Speaker Jim Black. Decker pleaded guilty to conspiracy in August, admitting he solicited and accepted $50,000 to support Black for House speaker in early 2003. Decker, a Republican, switched to the Democratic Party in a move that helped Black, D-Mecklenburg, win re-election as co-speaker.
Judge Dever has also said in a new court filing that former state lottery commissioner Kevin L. Geddings appears to have committed perjury in testimony last year at his trial on fraud charges and as a result, is considering tacking extra time onto any prison time recommended for Geddings under federal sentencing guidelines. Geddings' sentencing is set for May 7.
Despite the anxiety surrounding state and federal investigations, the court hearings have not slowed down the overwhelming amount of legislative work this session. NCRMA staff was buried this week in juggling issue after issue that would pop out of the woodwork. On top of committee hearings, House leadership was attempting to press through budget negotiations to get ahead of their budget deadline but the pressure was not enough to drive through the antagonizing interests of the nine budget chairs in the House.
We found out mid-week that the proposed budget would cut pharmacy reimbursement by $17 million (more details in the pharmacy section below) which kept us scurrying to talk to appropriations chairs. Fortunately for us, the entire House Budget blew up yesterday and late last evening the Chairs headed home.
The budget will continue to weigh heavily on our time but we must also work feverishly to push our initiatives through each chamber before Crossover Deadline on May 17th when every non-money bill must clear its house of origin to remain eligible for consideration. Read closely through the variety of issues we have been lobbying on this week and please give us feedback as you see legislation that affects your business.
ORT/Amend Larceny Laws bill rescheduled for Tuesday, thank you for your calls!
Energy Star Tax Holiday met with Senate leadership on Tuesday
Streamlined sales tax passed House, referred to Senate Finance
Electronics Recycling Bills met with Senator Hagan this week, scheduling meeting with Sen. Cowell
Coupon Bill scheduled for Senate Commerce on Tuesday
Bottle Bill rumors fly that bill will be heard on May 8
DOT Express Permitting scheduled in House Transportation on Wednesday
Rebate Redemption Deadlines met with Senator Stevens on language from AG
Sales Tax Holiday Changes met with sponsor, Representative Weiss, this week
Liability of Purveyors of Food for Obesity working with State Chamber and Restaurant Association
Bed bugs continuing to work with DENR
Prepaid Wireless pulled from committee this week
Statute of Repose working in coalition with State Chamber
PHARMACY ISSUES:
Budget Woes fighting tooth and nail to keep us whole
Insurers/Cover Rx in Emergencies HB 748 scheduled for House Insurance on Tuesday at 11am
E-Records Bill HB 1369 rescheduled for House Health on Tuesday at 12
Diabetes Management Working with Representative Allen to file bill next week.
1: ORGANIZED RETAIL THEFT (ORT)
HB 1379 Amend Larceny Laws, Representative Van Braxton (D-Lenoir)
http://www.ncleg.net/Sessions/2007/Bills/House/HTML/H1379v1.html
SB 1270: Amend Larceny Laws, Senator John Snow (D-Cherokee)
http://www.ncleg.net/Sessions/2007/Bills/Senate/HTML/S1270v0.html
Senator John Snow (D-Cherokee) is a former Judge who has introduced legislation on our behalf to crack down on Organized Retail Theft. SB 1270 will make the following a felony:
Receiving goods that are believed to be stolen, even if the goods are not stolen
Stealing goods in excess of $500 (current felony threshold is $1,000)
Stealing goods through an emergency exit door
Theft of infant formula in excess of $100
Removing or deactivating an anti-shoplifting device
Senator Snow called a meeting of the Senate Judiciary II ORT subcommittee for late Tuesday afternoon and we scurried to provide each member with a package of information related to each of the ORT issues in the bill.
We were successful in amending the violation for switching UPC codes to a Class H Felony rather than a misdemeanor as was included in the original draft. We also managed to preserve the other provisions as included in the original draft.
The bill was approved from subcommittee and sent to the full Judiciary II committee for a hearing on Thursday. We touched on every committee member of to explain the bill but the committee ran out of time before bringing SB 1270 up for consideration. The bill is now rescheduled for the next JII committee meeting on Tuesday.
THANK YOU to those of you that wrote letters, emails and made phone calls to members of the Senate Judiciary II committee in support of SB 1270! While it is important your NCRMA staff stay inform members on issues before a committee hearing - a legislator is always more responsive to you - their constituents. This is why it is so helpful when you contact your legislator to explain the effect that these bills have on your company.
2: ENERGY STAR TAX HOLIDAY
This week we were summoned to Senate President Pro Tem Marc Basnight's Office to discuss an Energy Star Sales Tax Holiday that peaked his interest as a means to push North Carolina consumers to become more energy efficient. In a very rare opportunity, we found ourselves in a conference room with Senator Basnight and about 10 other Senators with a couple of legislative staffers to talk over this issue. After a long discussion about energy and energy efficiency, the group wanted to gather more information with the possibility of introducing legislation. There is a hurdle with the Streamlined Sales Tax Agreement but if we can provide some answers to the Senate Leadership staff, it appears that we may be able to jump it. They are considering running this legislation late next week so please get back to us ASAP if you have answers to the questions below.
Some of the information Senator Basnight's staff had was that 90% of the dishwashers were Energy Star Products which caused them to lean towards not including dishwashers in the Holiday . Any information you have to counterbalance this information would be helpful. We will ensure that the information is not store specific.
3: STREAMLINED SALES TAX/BUNDLED TRANSACTIONS
HB 257 (SB 259): Representative Dewey Hill (D-Columbus)
http://www.ncleg.net/Sessions/2007/Bills/House/HTML/H257v1.html
HB 257 passed the House this week and was sent to the Senate. North Carolina has collected nearly $15 million in voluntary sales tax collections this year from remote vendors. Representative Hill's bill would provide some clarification on how bundled transactions such as gift baskets - should be taxed when the bundled goods would be taxed differently if sold separately. Although NCRMA has been the long-time champion of Streamlined Sales Tax, NCRMA had expressed some initial concern with the bill because of custom-made baskets and the need to continuously determine the applicable sales tax. The bill was fixed to exclude custom-made baskets from the new formula which means this legislation providing some tax clarity on these items will only apply to pre-made baskets and bundles.
This legislation would ensure North Carolina 's continued compliance with the Streamlined Sale Tax Agreement that is seeking to level the playing field between remote retailers and main street merchants. The bill now sits in the Senate Finance Committee.
4: ELECTRONICS RECYCLING
Senate Bill 1525 Senator Kay Hagan (D-Guilford)
http://www.ncga.state.nc.us/Sessions/2007/Bills/Senate/HTML/S1525v0.html
Your staff met with Senator Kay Hagan (D-Guilford) this week on Senate Bill 1525. Marc Pearl with the Consumer Electronics Retailers Coalition joined us for a conference call yesterday. Hagan's district is home to Dell and this bill, supported by Dell, is one that we have worked on since last fall. Senator Janet Cowell has also filed an electronics recycling bill. Cowell has filed ADF bills in the past, but this version is based on Maine legislation. We anticipate an effort from Senate leadership to work out a compromise between these two pieces of legislation that will later be incorporated into a larger/omnibus solid waste bill. NCRMA staff also met with Senator Cowell this week to organize another conference call to talk through the proposals.
We have spoken with both of the bill sponsors to explain to need to include televisions and feel good about being able to incorporate that change into a new draft. However, the two have yet to reach compromise on other aspects of the bill.
5: MANUFACTURER COUPONS/PURCHASING ABC PRODUCTS
SB 1478: Senator Ed Jones (D-Halifax)
http://www.ncleg.net/Sessions/2007/Bills/Senate/HTML/S1478v1.html
SB 1478 is scheduled for Tuesday's Senate Commerce committee meeting. State Alcoholic Beverage Control Commission rules now prohibit cents-off coupons or free beverages as part of alcohol advertising. This bill would allow a retailer to offer a discount coupon to purchase beer and wine or allow a customer to use the buyer's membership card, discount card or loyalty card to receive the discount.
We fought an uphill battle on coupons last session with both the legislature and the ABC Commission but despite our best efforts, we were unable to succeed in passing legislation or getting a new rule from the Commission. We had the votes but not the political stars in alignment to gain passage. We have already begun meeting with members of the Senate Commerce committee and hope to have a bi-partisan majority of support for the bill but it will again be an uphill battle.
6: BOTTLE BILL
SB 215: Senator Doug Berger (D-Franklin)
http://www.ncleg.net/Sessions/2007/Bills/Senate/HTML/S215v1.html
This bottle bill is based on the California-model but has many more complexities and moving parts as far as bottle bills go. SB 215 imposes a $0.10 deposit per container which would put North Carolina on the map with one of the most expensive Bottle deposits/taxes in the country and a very cumbersome system to collect bottles which would inevitably hurt the recycling programs already in place in North Carolina .
Berger maintains his optimism regarding the potential for this bill to be heard and rumors have been circulating that he expects a May 8 hearing date. His constituent pushing this initiative was making rounds at the legislative building this week. In the mean time, the NC Beverage Association had a group of over 40 members at the legislative building this week bending the ears of members of the Commerce Committee in opposition to SB 215.
There is still a great deal of confusion out there in terms of the statistics that supporter of the bill are touting with regard to the percentage of litter that would be reduced and the level of efficiency of this proposed program. Senator Berger continues working feverishly to garnish support for the bill but we are hopeful that we can put this bill to bed.
7: DOT EXPRESS PERMITTING
HB 1632: Representative Becky Carney (D-Mecklenburg) Ray, Saunders, Allen
http://www.ncleg.net/Sessions/2007/Bills/House/HTML/H1632v1.html
HB 1632 arose from discussions early in the session about delays with DOT permitting. The bill has been scheduled for next Wednesday in the House Transportation committee.
Unlike the Department of Environment and Natural Resources, the Department of Transportation does not have an express permitting process. It has become an ordeal for many retailers to get driveway, encroachment or signaling permits in a timely manner.
DOT staff admitted that there are delays particularly in the area of driveway permits but were concerned that there would not be enough time to try to implement a DOT express permitting program this year. It took an appropriation for DENR to begin their program and the DOT budget has already been submitted. This study bill would direct the Joint Legislative Transportation Oversight Committee to conduct a study of this issue and report back by March 10, 2008. The bill is in the House committee on Transportation.
8: REBATES REDEMPTION DEADLINE
SB 1055 - Senator Richard Stevens (R-Wake)
http://www.ncleg.net/Sessions/2007/Bills/Senate/HTML/S1055v1.html
We have been reporting our progress to you on this bill that initially would have required persons offering rebates to mail the rebate within 30 days after the postmark date of the completed rebate form submitted by the consumer. Senator Stevens has been very reasonable and agreed to extend the mail-in time frame to 60 days. Senator Stevens also agreed to a $5.00 dollar threshold. Senator Stevens wanted to discuss some of the changes with us this week that the Attorney General's office submitted. We did get the chance to meet with Stevens and review the AG's language and it appears that we should be able to continue to make progress on this bill.
9: HB 1635: SALES TAX HOLIDAY CHANGES
Introduced by: Representative Jennifer Weiss (D-Wake)
http://www.ncleg.net/Sessions/2007/Bills/House/HTML/H1635v0.html
This bill moves the sales tax holiday to the third Friday through Sunday in August, increases the cap on the sales price of eligible textbooks to $300, and amends the definition of school instructional material.
This bill was set to be effective July 1, 2007 which gave us concern since most retailers, along with the Department of Revenue have already been preparing materials for this year's sales tax holiday as is. We discussed the issue with Weiss this week and she seemed to understand our concerns. Referred To House Committee On Commerce, Small Business and Entrepreneurship & if favorable, to finance.
10: HB 1835: LIABILITY OF PURVEYORS OF FOOD FOR OBESITY
Introduced by: Representatives Daughtridge, Hill, Crawford, Brubaker.
http://www.ncleg.net/Sessions/2007/Bills/House/HTML/H1835v1.html
This bill would prohibit civil actions against food vendors arising out of weight gain, obesity, a health condition associated with weight gain or obesity, or any other known condition resulting from long-term consumption or food unless the civil actions related to state or federal adulteration or misbranding laws or laws regarding the manufacturing, marketing, distribution, advertising, labeling, or sale of food.
We have been working with the NC Restaurant Association along with the NC Chamber of Commerce in support of this legislation.
11: BED BUGS
SB 1331 Modify Bedding Sanitation Laws Senator Bill Purcell (D-Scotland)
http://www.ncga.state.nc.us/Sessions/2007/Bills/Senate/HTML/S1331v1.html
NCRMA continues to work with the Department of Environment and Natural Resources on SB1331 that would dramatically expand the law on inspection and storage for bedding and what items the law would apply to going forward.
The Department continues to want to expand the law requiring inspection, storage and sanitizing from mattresses and box springs to things like tables, chairs, sofas, couches, rugs, carpets, dressers, cabinets, bed frames, bed posts, bed headboards, bed footboards, and any other furniture normally found in a home or rental unit.
The Department would also like to redefine a second-hand good as any item that is kept overnight rather than actually used. And finally, the Department bent on its stance this week on wanting to require that second-hand items must be kept in a separate building rather than in a separate room as is now required. The Department believes it would be as simple as requiring each item to be inspected and if there are no bed bugs, that the item could be stored anywhere in the store. The Department offered to provide training for retailers probably without recognizing how many retail outlets there are in the state.
The bill sponsor, Senator Purcell, requested that we continue discussions with the Department but does not seem to have this at the top of his priority list.
12:PREPAID WIRELESS/SERVICE CHARGES
HB 1680/SB 1398: http://www.ncleg.net/Sessions/2007/Bills/House/HTML/H1680v1.html
H.B. 1681/SB 1400: Prepaid Wireless Phone Service Charges/Study
http://www.ncleg.net/Sessions/2007/Bills/House/HTML/H1681v1.html
HB 1680 amends the service charge for prepaid wireless service and allows retail vendors of prepaid wireless service to collect the service charges and remit the amounts to the Wireless 911 Board. This is similar to legislation being introduced all over the country at the request of Trac Phone and would require retailers to collect the 911 wireless tax and remit this money to the Wireless 911 Board.
This bill was sent to the Public Utilities committee, Chaired by Representative Drew Saunders (D-Mecklenburg), who NCRMA staff spoke with this week. The bill was scheduled to be heard on Wednesday in the Public Utilities committee but was pulled from the calendar. We are scheduled to meet with bill sponsor, Representative Jones, at the first of next week.
We are hoping to steer the committee in the direction of the study bill (HB 1681) rather than enacting this legislation.
13: STATUTE OF REPOSE
SB 969, Senator Janet Cowell (D-Wake)
HB 1343, Representatives Rick Glazier (D-Cumberland) and Jimmy Love (D-Lee)
http://www.ncleg.net/Sessions/2007/Bills/Senate/HTML/S969v1.html
A statute of repose establishes a time period after which the producer of a good can no longer be held liable for the performance of a product. This statute is a legal recognition that products will eventually fail to perform as well as they did when they were new and establishes that the owner of the product bears the responsibility for upkeep and routine maintenance.
Currently, NC law provides that all products liability actions must be brought within 6 years from the date of purchase, but now that legal standard is under attack. As a part of the growing national trend of increase in liability of employers - this bill would more than double the time period to 15 years, plus it would apply retroactively to cover purchases made since 1992.
These two bills would more than double the amount of time during which products liability actions can be brought against manufacturers, as well as distributors and everyone else along the product chain from manufacturer to consumer and would cause North Carolina become one of three states with the longest period for filing product liability claims. Such a dramatic and unnecessary change would not only deter businesses from staying here, but would also serve as a disincentive for new businesses in deciding whether to come to our state.
SB 969 bill has been referred to the Senate Judiciary I committee, chaired by Senator Martin Nesbitt (D-Buncombe) and HB 1343 has been referred to House Representative Dan Blue's (D-Wake) Judiciary II committee.
We met with the NC Chamber of Commerce this week to discuss a strategy on this bill and have signed on to work with a coalition in opposition.
PHARMACY ISSUES
14: BUDGET WOES
On Tuesday, the House Health and Human Services Appropriations Sub-Committee rolled out their version of the Budget. There was again no specific mention of pharmacy reimbursement being cut actually there was no reference to pharmacies at all. There was a line-item in the Budget for a $69,000,000 cut to not fund inflationary increases which are commonly paid to hospitals, doctors etc. We later found out that for the first time, pharmacies have been lumped into the group for inflationary increases but not in a good way.
It appears that this Committee wants to pay pharmacies for the drug product cost for the entire year based upon the cost of the drug on July 1st without regard to any price increases from manufacturers which may occur. For pharmacies the estimated impact was a cut of about $17 million (state funds not including federal matching funds).
Tuesday evening, the Association of Community Pharmacists sent out a fax to generate calls to members of the Appropriations Subcommittee and the full Appropriations Chairs. On Wednesday, the Appropriations Sub-Committee Chairs and Chairs had their phones rung off the hook to the tune of between 100 and 300 phone calls per office. In the meantime, we staked out the area outside where the Appropriations Chairs were meeting from 7:45 am until 6:00 pm both Wednesday and Thursday and spoke with every Appropriations Chair and Subcommittee Chair as well as with the House Majority Leader Hugh Holliman and Speaker Joe Hackney.
We told these decision makers that drug manufacturers may increase their prices three to four times a year and even showed them certain drugs that increased by 20 to 25%. We also told them that no other state in the country pays pharmacies in such a manner and that it was unreasonable to believe that pharmacists would fill prescriptions at a loss and in some cases at a loss of hundreds of dollars. Several Appropriations Chairs have told us to keep up the good work and that we were making progress.
As of right now, we have the $17 million cut in half which is still not acceptable. In conversations with Senate HHS Subcommittee Chairs, there appears to be more optimism that they won't lump pharmacists into the inflationary increase and in our case decrease group. We'll keep pushing to get this cut to zero next week.
15: INSURERES/COVER Rx IN EMERGENCIES
House Bill 748/Senate Bill 712 Representatives Rick Glazier (D-Cumberland), Marvin Lucas (D-Cumberland) and Becky Carney (D-Mecklenburg); Senator Bill Purcell (D-Scotland)
http://www.ncleg.net/Sessions/2007/Bills/House/HTML/H748v1.html
This bill would require insurers to cover extra prescriptions during a state of emergency or disaster. We have met with the bill sponsors and worked out any concerns with the bill and are satisfied with its current format. The bill is scheduled to be heard in the House Insurance committee on Tuesday.
16: ELECTRONIC PRESCRIPTION RECORDS
HB 1269 Prescription Orders/Electronic Image Representative Lucy Allen (D-Franklin)
http://www.ncleg.net/Sessions/2007/Bills/House/HTML/H1369v0.html
HB 1269 was originally scheduled to be heard yesterday in House Health committee but due to budget negotiations was postponed and is now scheduled for Tuesday. Current law requires every pharmacist-manager of a pharmacy to maintain, for a minimum of three years, the original of every prescription order and refill compounded or dispensed at the pharmacy - except for prescription orders recorded in a patient's medical record. This NCRMA initiated bill allows a pharmacy to comply with this requirement by maintaining an electronic image of a prescription order or refill in lieu of a hard copy.
17: DIABETES MANAGEMENT LEGISLATION
We have continued to work with Representative Lucy Allen (D-Franklin) on a house bill to extend Diabetes Self-Management Education (DSME) coverage to NC Medicaid Beneficiaries when a program is ADA accredited. Currently, reimbursement is contingent upon outpatient training services being provided incident to the physician. Diabetes management programs are a cost-saver by reducing Hemoglobin A1c, blood pressure, weight and increased compliance to preventative care. We expect the bill to be filed next week.
Thank you for allowing us to continue to represent the retail perspective before the North Carolina General Assembly since 1902.
Until next week.
Fran Preston (franp@ncrma.org)
Andy Ellen (andye@ncrma.org)
Elizabeth Dalton (elizabethd@ncrma.org)
Lindsey Kueffner (lindseyk@ncrma.org)
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